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McDonald was born to Susan and David McDonald, in Auburn/Opelika. His father is a clinical psychologist and his mother teaches occupational therapy at the University of Tennessee Chattanooga. McDonald was raised in Huntsville, Alabama. He is a graduate of Huntsville High School, where he also played wide receiver on the varsity football team, and he was in the school's play, "The Wizard of Oz", directed by Mike Chappell.

In August 2010, McDonald and his band members moved to Nashville, Tennessee, and launched a campaign to let their fans choose a new name for the band. The group's first album under its new name, entitled The Grand Magnolias, was released in 2011. The songs were written by McDonald and band member Jonathan Pears and produced by Dan Hannon and Ken Coomer. The album has seen a boost in sales since Paul McDonald’s appearance on American Idol,[1] and it reached number twelve on the Billboard Heatseekers chart and had sold 9,000 copies by April 27, 2011.[2] iTunes pulled the album from its store, without explanation, and the sales dropped off 60% from the previous week. A week later the album returned, again without explanation.[3]

When the band learned that McDonald had made it through to the Hollywood round they put together a content release campaign to maximize the exposure from the show.[4]

On January 27, 2011, McDonald received a golden ticket to compete in Hollywood from judges Steven Tyler, Jennifer Lopez and Randy Jackson, and made it into the Top 24[5] by singing an original song, "American Dreams." He was one of ten candidates chosen as a finalist based on public voting.[6] Thirteen competed in the finals.

Since entering the competition, McDonald has made use of the social networking site Twitter to communicate with his fans and promote his band, The Grand Magnolias.[7] The album also debuted on the Billboard Heatseekers chart before McDonald even sang in the show’s semi-final round.[8] He was also the first 2011 Idol hopeful to reach 50,000 followers on his newly created official American Idol Twitter account.[9] McDonald continues to be one of the most popular American Idol Season 10 competitors on the social networking site.[10][11]

McDonald was eliminated from the show on April 14, 2011, with a finish of 8th place.[12]

McDonald was one of the 11 performers in the 2011 American Idols Live Tour, which began in West Valley City, Utah, on July 6, 2011, and ended in Rochester, New York, on September 10, 2011. On May 25, 2011 he appeared on Rachael Ray along with Stefano Langone and Pia Toscano.[15] McDonald even recorded a song, "Now That I've Found You", with his wife Nikki Reed, which debuted on Ryan Seacrest's radio show on November 15, 2011.[16] The couple released their first EP together, The Best Part, on October 29, 2012.[17]

In September 2012, McDonald appeared in a Parenthood episode as a musician who used Crosby and Adam's recording space, The Luncheonette, and sang a new song, "Counting Stars."

McDonald and his wife, Nikki Reed, starred in Hanson's 2013 music video for "Get the Girl Back".[18] The video was filmed in January 2013, and released in April, 2013. As well as Paul and Nikki, other famous faces in the video include Kat Dennings, Drake Bell, Drew Seeley, Amy Paffrath, and Alex Beh. On July 8, 2014, McDonald and Reed released an album titled I'm Not Falling.[19]

In 2014, McDonald launched his solo career by releasing a single, "Bright Lights," on October 7, 2014,[20] and a video released on November 3, 2014.[21]

McDonald met actress Nikki Reed on the red carpet at the premiere of Red Riding Hood in March 2011. The moment they met was broadcast on an American Idol episode as part of a segment that showed McDonald and his fellow contestants attending the premiere.[22] McDonald and Reed soon began dating,[23] and moved in together not long after.[24] Their engagement was confirmed in June 2011,[25][26] and they married on October 16, 2011 in Malibu, California.[27] In March 2014, McDonald and Reed announced that they had separated.[28] Reed filed for divorce on May 16, 2014, citing irreconcilable differences.[29] The divorce was finalized in January 2015.[30] In 2017, McDonald began dating actress/singer Emily Kinney, and the duo began their own band, The Sweetheart Deal.